SECOND AMENDED AND RESTATED
FORBEARANCE, LOCK-UP AND VOTING AGREEMENT
This SECOND AMENDED AND RESTATED FORBEARANCE, LOCK-UP AND VOTING
AGREEMENT (this "Agreement") is made and entered into as of May 18, 2000 by and
between Innovative Clinical Solutions, Ltd., a Delaware corporation ("ICSL" or
the "Company"), and the holders listed on the Schedule of Consenting Holders
attached hereto, (each, a "Consenting Holder," and collectively, the "Consenting
Holders"). The Company and the Consenting Holders are collectively referred to
herein as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, ICSL and the Consenting Holders have previously entered into
that certain Forbearance, Lock-Up and Voting Agreement dated as of January 17,
2000 (as amended and restated by that certain Amended and Restated Forbearance,
Lock-Up and Voting Agreement dated as of April 7, 2000, the "Original
Agreement") with regard to restructuring the indebtedness outstanding under
ICSL's 6 3/4% Convertible Subordinated Debentures due 2003 (the "Old Convertible
Subordinated Debentures");
WHEREAS, ICSL and the Consenting Holders now desire to amend and
restate the Original Agreement and implement a financial restructuring (the
"Financial Restructuring") of ICSL pursuant to a pre-packaged Chapter 11
bankruptcy filing by ICSL and all of its wholly-owned subsidiaries (the
"Subsidiaries") on the terms set forth in this Agreement and the Term Sheet
attached as Exhibit A hereto (the "Term Sheet");
WHEREAS, in order to implement the Financial Restructuring, ICSL and
the Subsidiaries intend, subject to the terms and conditions of this Agreement,
to, (i) prepare and, if necessary, file with the Securities and Exchange
Commission a Prepetition Disclosure and Solicitation Document (the "Solicitation
Document") containing "adequate information" as such term is defined in section
1125(a) of title 11 of the United States Code (the "Bankruptcy Code"); (ii)
prepare a plan of reorganization (the "Prepackaged Plan") consistent with this
Agreement and the Term Sheet; (iii) solicit requisite acceptances of the
Prepackaged Plan from holders of impaired claims prior to the commencement of
proceedings under chapter 11 of the Bankruptcy Code (the "Chapter 11
Proceedings"); and (iv) if requisite acceptances are obtained, commence the
Chapter 11 Proceedings to implement the terms of the Financial Restructuring;
WHEREAS, in order to facilitate the implementation of the Financial
Restructuring, the Consenting Holders are prepared to commit, as set forth in
more detail herein, during the period commencing on the date hereof and ending
on the date a Termination Event (as defined herein) first occurs, and no longer,
(i) to forbear from exercising remedies in respect of the Old Convertible
Subordinated Debentures, and (ii) not to sell, transfer or assign any of the Old
Convertible Subordinated Debentures except as permitted herein;
WHEREAS, the Consenting Holders are prepared to commit, on the terms
and subject to the conditions of this Agreement, to consent to a Prepackaged
Plan that satisfies the Conditions (as defined herein).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
ICSL and the Consenting Holders hereby agree as follows:
1. Forbearance. During the period commencing on the date hereof and
ending on the date that a Termination Event first occurs, and no longer, each of
the Consenting Holders hereby agrees to forebear (and agrees not to give any
instructions to the trustee under the Old Convertible Subordinated Debenture
Indenture inconsistent with such forbearance) from the exercise of any rights or
remedies it may have under or with respect to the Old Convertible Subordinated
Debentures or the Old Convertible Subordinated Debenture Indenture (the
"Existing Agreements"), applicable law or otherwise, with respect to any default
in existence or arising under the Existing Agreements; provided, however, during
such period, ICSL shall have continued to comply with its obligations under the
terms and conditions of this Agreement. In the event that this Agreement shall
terminate, the Consenting Holders shall have, and shall be entitled to exercise,
each of their rights or remedies under the Existing Agreements and applicable
law, as if this Agreement was never executed (and shall not be deemed to have
waived any such rights or remedies by virtue of executing this Agreement).
2. Voting, Consent and/or Tender. Each of the Consenting Holders
represents that, as of the date hereof, it is the beneficial owner and/or the
investment adviser or manager for the beneficial owner (with the power to vote
and dispose of Old Convertible Subordinated Debentures on behalf of such
beneficial owner) of Old Convertible Subordinated Debentures set forth on the
schedule attached to its signature page (for each such Party, the "Relevant
Claims"). Each of the Consenting Holders agrees that, subject to the condition
that the terms of the Prepackaged Plan and all documents attendant thereto,
including, without limitation, the terms, financial instruments, and security
documents (if any) to be provided to the holders of the Old Convertible
Subordinated Debentures (collectively, the "Attendant Documents"), contained in
the Solicitation Document relating to the Old Convertible Subordinated
Debentures include and/or are consistent with the terms set forth in the Term
Sheet, and are in form and substance satisfactory in all other respects, it
shall timely vote (including instructing custodial agents to vote, as the case
may be) the entirety of its Relevant Claims to accept the Prepackaged Plan. Each
of the Consenting Holders also agrees that, subject to the conditions that (i)
all classes of impaired claims shall have accepted the Prepackaged Plan as
provided in section 1126(c) of the Bankruptcy Code, and (ii) the court in the
Chapter 11 Proceedings the "Bankruptcy Court") shall have determined that the
solicitation of holders of impaired claims was in compliance with section
1126(b) of the Bankruptcy Code, it shall not withdraw or revoke its vote except
as permitted herein. Each of the conditions set forth in this Section 2 shall
hereinafter be referred to collectively as the "Conditions".
3. Restriction on Transfer. Each of the Consenting Holders hereby
agrees that, during the period commencing on the date hereof and ending on the
date that a Termination Event first occurs, and no longer, it shall not sell,
transfer or assign any of the Relevant Claims or any option thereon or any right
or interest (voting or otherwise) therein, unless the transferee thereof agrees
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in writing to be bound by all the terms of this Agreement by executing a
counterpart signature page of this Agreement and the transferor provides ICSL
with a copy thereof, in which event ICSL shall be deemed to have acknowledged
that its obligations to the Consenting Holders hereunder shall be deemed to
constitute obligations in favor of such transferee, and ICSL shall confirm that
acknowledgment in writing.
4. ICSL Agreements. ICSL hereby agrees to use its reasonable best
efforts to have the prepetition solicitation of holders of impaired claims
approved by the Bankruptcy Court pursuant to section 1126(b) of the Bankruptcy
Code, and shall thereafter take all reasonable steps necessary and desirable to
obtain an order of the Bankruptcy Court confirming the Prepackaged Plan as
expeditiously as possible under the provisions, rules and regulations of the
Bankruptcy Code and the Bankruptcy Rules.
5. Support of the Plan. ICSL will use its reasonable best efforts to
obtain the required consent of 66-2/3% of the holders of the Old Convertible
Subordinated Debentures to the Prepackaged Plan and confirmation of the
Prepackaged Plan in accordance with the Bankruptcy Code as expeditiously as
possible. The Consenting Holders will take all necessary and appropriate actions
to support the Prepackaged Plan and the confirmation thereof. The Consenting
Holders shall not (a) object to the Solicitation Document or confirmation of a
Prepackaged Plan that satisfies the Conditions or otherwise commence any
proceeding to oppose or alter a Prepackaged Plan that satisfies the Conditions
or any other reorganization documents containing terms that satisfy the
Conditions, (b) vote for, consent to, support or participate in the formulation
of any other plan of reorganization or liquidation proposed or filed or to be
proposed or filed in any chapter 11 or chapter 7 case commenced in respect of
ICSL provided that ICSL is supporting a Prepackaged Plan that satisfies the
Conditions, (c) directly or indirectly seek, solicit, support or encourage any
other plan, proposal or offer of dissolution, winding up, liquidation,
reorganization, merger or restructuring of ICSL or any of its subsidiaries that
could reasonably be expected to prevent, delay or impede the successful
restructuring of ICSL as contemplated by the Prepackaged Plan, provided that the
Prepackaged Plan satisfies the Conditions, (d) object to the Solicitation
Document or the solicitation of consents to the Prepackaged Plan, provided that
the Prepackaged Plan satisfies the Conditions, or (e) take any other action that
is inconsistent with, or that would delay confirmation of the Prepackaged Plan,
provided that the Prepackaged Plan satisfies the Conditions.
6. Acknowledgment. This Agreement is not and shall not be deemed to be
a solicitation for consents to the Prepackaged Plan. The acceptance of the
Consenting Holders will not be solicited until the Consenting Holders have
received the Solicitation Document and related documents.
7. Termination of this Agreement and Consenting Holders's Obligations.
The Consenting Holders may terminate their obligations hereunder and rescind any
consent to the Prepackaged Plan by such Consenting Holders (which consent shall
be null and void and have no further force and effect) and this Agreement shall
terminate if any of the following events (any such event, a "Termination Event")
occur: (i) ICSL files, propounds or otherwise supports any plan of
reorganization or liquidation that does not satisfy the Conditions; and (ii) the
Prepackaged Plan is modified or replaced such that it (or any such replacement)
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at any time does not satisfy the Conditions; (iii) the Solicitation Document is
not distributed to holders of impaired claims on or before June 5, 2000; (iv)
the Chapter 11 Proceedings are not commenced on or before July 15, 2000; (v) the
Prepackaged Plan is not consummated on or before October 20, 2000; or (vi) ICSL
shall have disclaimed in writing its intention to pursue the restructuring or
has otherwise materially breached this Agreement and shall not have cured any
breach within thirty (30) days of receiving written notices thereof.
8. Representations and Warranties. Each of ICSL and the Consenting
Holders represents and warrants to each other the following statements are true,
correct and complete as of the date hereof:
(a) Power and Authority. It has all requisite power and
authority to enter into this Agreement and to carry out the transactions
contemplated by, and perform its respective obligations under, this Agreement.
(b) Authorization. The execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly
authorized by all necessary corporate, trust, partnership or LLC action on its
part.
(c) No Conflicts. The execution, delivery and performance by
it of this Agreement do not and shall not (i) violate any provision of law, rule
or regulation applicable to it or any of its subsidiaries or its Certificate of
Incorporation or bylaws or other organizational documents or those of any of its
subsidiaries or (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any material contractual
obligation to which it or any of its subsidiaries is a party.
(d) Governmental Consents. The execution, delivery and
performance by it of this Agreement do not and shall not require any
registration or filing with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body, except such filings as may be necessary and/or required for
disclosure by the Securities and Exchange Commission and in connection with the
commencement of the Chapter 11 Proceedings, the approval of the Solicitation and
confirmation of the Prepackaged Plan.
(e) Binding Obligation. This Agreement is the legally valid
and binding obligation of it, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
9. Further Acquisition of Securities. This Agreement shall in no way
be construed to preclude the Consenting Holders from acquiring additional
Claims. However, any such additional Claims so acquired shall automatically be
deemed to be Relevant Claims and to be subject to the terms of this Agreement.
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10. Amendments. This Agreement may not be modified, amended or
supplemented except in writing signed by ICSL and the Consenting Holders.
11. Disclosure. Unless required by applicable law or regulation, ICSL
shall not disclose any of the Consenting Holders' holdings of Relevant Claims
without the prior written consent of the applicable Consenting Holder, and if
such announcement or disclosure is so required by law or regulation, ICSL shall
afford such Consenting Holders a reasonable opportunity to review and comment
upon any such announcement or disclosure prior to such announcement or
disclosure. The foregoing shall not prohibit ICSL from disclosing the names of
the Consenting Holders or the existence and terms of this Agreement; provided,
however, that any press release of ICSL naming the Consenting Holders
(individually or as an ad hoc committee) shall be acceptable to the Consenting
Holders, such approval not to be unreasonably withheld, delayed or denied.
12. Impact of Appointment to Creditors Committee. If an official
committee of unsecured creditors or of holders of Old Convertible Subordinated
Debentures is appointed by the United States Trustee in a Chapter 11 Proceeding,
to the extent that the Consenting Holders wish, in their sole and absolute
discretion, to be appointed to any official committee of unsecured creditors or
holders of Old Convertible Subordinated Debentures, ICSL shall cooperate with
the Consenting Holders in seeking to cause the United States Trustee to appoint
the Consenting Holders to be a member of an official committee pursuant to
Section 1102 of the Bankruptcy Code. Notwithstanding anything herein to the
contrary, in the event that any of the Consenting Holders are appointed to and
serve on a committee of creditors or holders of Old Convertible Subordinated
Debentures in a Chapter 11 Proceeding, the terms of this Agreement shall not be
construed so as to limit such Consenting Holder's exercise (in their sole and
absolute discretion) of its fiduciary duties to any person arising from its
service on such committee, and any such exercise (in the sole and absolute
discretion of such Consenting Holders) of such fiduciary duties shall not be
deemed to constitute a breach of the terms of this Agreement (but the fact of
such service on such committee shall not otherwise affect the continuing
validity or enforceability of this Agreement).
13. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing (including by facsimile with
written confirmation thereof) and unless otherwise expressly provided herein,
shall be delivered during normal business hours by hand, by Federal Express,
United Parcel Service or other nationally recognized overnight commercial
delivery service, or by facsimile notice, confirmation of receipt received,
addressed as follows, or to such other address as may be hereafter notified by
the respective parties hereto:
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(1) If to the Consenting Holders:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile Number: (000) 000-0000
With a copy, which will not constitute notice, to:
White & Case
1155 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx XxXxxxxx
Facsimile Number: 000-000-0000
(2) If to the Company:
Innovative Clinical Solutions, Ltd.
00 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Facsimile Number: 000-000-0000
With a copy, which will not constitute notice, to:
Xxxxxx Xxxxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Facsimile Number: 000-000-0000
14. Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Delaware,
without regard to any conflicts of law provision which would require the
application of the law of any other jurisdiction. By its execution and delivery
of this Agreement, each of the Parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, may be brought in the District Court of
Delaware. By execution and delivery of this Agreement, each of the parties
hereto hereby irrevocably accepts and submits itself to the nonexclusive
jurisdiction of each such court, generally and unconditionally, with respect to
any such action, suit or proceeding. Notwithstanding the foregoing consent to
Delaware jurisdiction, upon the commencement of any Chapter 11 Proceedings, each
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of the Parties hereto hereby agrees that the Bankruptcy Court shall have
exclusive jurisdiction of all matters arising out of or in connection with this
Agreement.
15. Specific Performance. It is understood and agreed by each of the
Parties hereto that money damages would not be a sufficient remedy for any
breach of this Agreement by any Party and each non-breaching Party shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy of any such breach.
16. Headings. The headings of the sections, paragraphs and subsections
of this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
17. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of the Parties and their respective successors, assigns,
heirs, executors, administrators and representatives.
18. Prior Negotiations. This Agreement and the Term Sheet supersede
the Original Agreement and all prior negotiations with respect to the subject
matter hereof.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement.
20. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties hereto and no other
person or entity shall be a third-party beneficiary hereof.
21. Consideration. It is hereby acknowledged by the Parties hereto
that, except as otherwise set forth in the Term Sheet, no consideration shall be
due or paid to the Consenting Holders for their agreement to consent to the
Prepackaged Plan in accordance with the terms and conditions of this Agreement
other than ICSL's agreement to use its reasonable best efforts to obtain
approval of Prepackaged Plan and to take all steps necessary and desirable to
confirm the Prepackaged Plan in accordance with the terms and conditions of this
Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer as of the
date first above written.
INNOVATIVE CLINICAL SOLUTIONS, LTD.
By: /s/Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman
THIRD AVENUE TRUST ON BEHALF OF THE
THIRD AVENUE VALUE FUND SERIES
By: /s/Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: President
X.X. XXXXXXX PILOT FISH OPPORTUNITY
FUND LP
By: X.X. Xxxxxxx Pilot Fish Opportunity
Fund Inc., general partner
By: /s/Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: President
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SCHEDULE OF CONSENTING HOLDERS
------------------------------------ -------------------------------------------
Holder Principal Amount of Debentures
------------------------------------ -------------------------------------------
------------------------------------ -------------------------------------------
Third Avenue Value Fund $49,155,000
------------------------------------ -------------------------------------------
------------------------------------ -------------------------------------------
X.X. Xxxxxxx Pilot Fish Opportunity $1,750,000
Fund LP
------------------------------------ -------------------------------------------
------------------------------------ -------------------------------------------
------------------------------------ -------------------------------------------
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